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2010-069 RES EXTENSION OF NOTE PEDC AND PARIS PACKAGINGRESOLUTION NO. 2010-069 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, APPROVING THE PEDC RESOLUTION AUTHORIZING THE FIRST AMENDED RENEWAL AND EXTENSION PROMISSORY NOTE AND SECOND ADDENDUM TO THE SECURITY AGREEMENT BETWEEN PARIS PACKAGING, INC. AND PARIS ECONOMIC DEVELOPMENT CORPORATION (PEDC), TO REFLECT A LOWER INTEREST RATE; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on July 13, 1998, the Paris Economic Development Corporation passed Resolution No. 98-011, authorizing and approving a loan in the amount of $4,000,000.00 to Paris Packaging, Inc. with a five-year term and a seven percent (7%) interest rate; and, WHEREAS, on April 16, 2003, the PEDC passed Resolution No. 2003-003 authorizing and approving a Renewal and Extension of the 1998 Promissory 1Vote by extending the maturity date of the Note from July 15, 2003 to April 15, 2017; and, WHEREAS, the original $4,000,000 loan from PEDC to Paris Packaging, Inc. was financed in part through PEDC's issuance of $4,000,000 in Sales Tax Revenue Bonds, Series 1998; and, WHEREAS, on March 22, 2010, the PEDC passed a resolution authorizing the issuance of $2,685,000.00 in Refunding Bonds to refinance the 1998 Series Sales Tax Revenue Bonds at a Net Interest Cost (NIC) of 3.689%; and, WHEREAS, on March 22, 2010, the Paris Economic Development Corporation voted to pass the interest rate savings generated from the 2010 Refunding Bonds to Paris Packaging, Inc.; and, WHEREAS, it is now deemed necessary and appropriate to amend the 2003 Renewal and Extension Promissory IVote and the Security Agreement between the PEDC and Paris Packaging, Inc. to reflect the lower interest rate and revised amortization schedule. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the Resolution of the Paris Economic Development Corporation dated June 24, 2010 which approved and authorized the Chairman of the PEDC to enter into a First Amended Renewal and Extension Promissory Note with Paris Packaging, Inc., as Maker, and payable to the order of Paris Economic Development Corporation, as Payee, the same being a renewal and extension of that original note executed by Paris Packaging, Inc., as Maker, and payable to Paris Economic Development Corporation, as Payee dated July 15, 1998 attached hereto and incorporated herein as Exhibit "A", be authorized and approved. Section 3. That said First Amended Renewal and Extension Promissory Note shall be in the principal amount of $2,073,242.00, with interest at a yearly rate of three point fifty-five percent (3.55%) with monthly payments of $28,511.17 due and payable on the fifteenth (15th) day of each month beginning on July 15, 2010, and continuing thereafter until a final payment of the unpaid balance is made on April 15, 2017, the maturity date set out in said note. Section 4. That, the Second Addendum to the Security Agreement attached to and incorporated in the PEDC Resolution is hereby in all things approved. Section 5. That this resolution shall be effective from and after its date of passage. PASSED AND ADOPTED this 28th day of June, 2010. ill ard , Mayor ATTEST: nn~~ E Qa~ anice Ellis, City Clerk APPROVED AS TO FORM: Kent McIlyar, Ci Att ney PARIS ECONOMIC DEVELOPMENT CORPORATION RESOLUTION N0. PEDC -2010-002 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE PARIS ECONOMIC DEVELOPMENT COPRORATION AUTHORIZING AND APPROVING THE FIRST AMENDED RENEWAL AND EXTENSION PROMISSORY NOTE AND SECOND ADDENDUM TO THE SECURITY AGREEMENT BETWEEN PARIS PACKAGING, INC. AND PARIS ECONOMIC DBVELOPMENT CORPORATION TO REFLECT A LOWER INTEREST RATE; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, On July 13, 1998, the Paris Economic Development Corporation passed Resolution No. 98-011, authorizing and approving a loan in the amount of $4,000,000.00 to Paris Packaging, Inc. with a five-year term and a seven percent (7%) interest rate; and, WHEREAS, on April 16, 2003, the PEDC passed Resolution No. 2003-003 authorizing and approving a Renewal and Extension of the 1998 Promissory Note by extending the maturity date of the Note from July 15, 2003 to April 15, 2017; and, WHEREAS, the original $4,000,000 loan from PEDC to Paris Packaging, Inc. was financed in part through PEDC's issuance of $4,000,000 in Sales Tax Revenue Bonds, Series 1998; and, WHEREAS, in order to take advantage of lower interest rates, on March 22, 2010, the PEDC passed a Resolution authorizing the issuance of $2,685,000.00 in Refunding Bonds to refinance the 1998 Series Sales Tax Revenue Bonds at a Net Interest Cost (NIC) of 3.689%; and, WHEREAS, on March 22, 2010, the Paris Economic Development Corporation voted to pass the interest rate savings generated from the 2010 Refunding Bonds to Paris Packaging, Inc.; and, WHEREAS, it is now deemed necessary and appropriate to amend the 2003 Renewal and Extension Promissory Note and the Security Agreement between the PEDC and Paris Packaging, Inc. to reflect the lower interest rate and revised amortization schedule. NOW, THEREFORE, BE IT RESOLVED BY THE PARIS ECONOMIC DEVELOPMENT CORPORATION: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. EXHIBIT g Section 2. That the First Amended Renewal and Extension Promissory Nate executed by Paris Packaging, Inc., as Maker, and payable to the order of Paris Economic Development Corporation, as Payee attached hereto and incorporated herein as Exhibit "A", the same being a renewaI and extension of that original note executed by Paris Packaging, Inc., as Maker, and payable to Paris Economic Development Corporation, as Payee, dated JuIy 15, 1998 be authorized and approved. Section 3. That said First Amended Renewal and Extension Promissory Note shall be in the principal amount of $2,073,242.00, with interest at a yearly rate of three point fifty-five percent (3.55°10) with manthly payments of $28,511.17 due and payable on the fifteenth (15th) day of each month beginning on July 15, 2010, and continuing thereafter until a final payment of the unpaid balance is made on April 15, 2017, the maturity date of said note as set forth in the Amortization Schedule attached hereto and incorporated herein by reference as Exhibit "B". Seetion 4. That the Chairman of the Board of the Paris Economic Development Corporation, be, and he is hereby authorized and directed ta execute on behalf of the Paris Economic Development Corporation, the First Amended Renewal and Extension Promissory Note, and Second Addendum to Security Agreement (consumer goods, equipment, and farm products) to secure the pledge of assets by Paris Packaging, Inc. to the payment of the aforesaid note, and any and all other necessary documents assaciated with said transaction. Sectidn S. That this resolution shall be effective from and after its date of passage. PASSED AND ADOPTED this 24th day of June, 2010. ATTE$i / Rick Poston , Secretary-Treasurer APPROVED AS TO FORM: Kent McIlyar, City Atty Dan Smi , Chairman FIRST AMENDED RENEWAL AND EXTENSION PROMISSORY NOTE July 1, 2010 800 W. Center Street Paris, Texas AMENDMENT AND RENEWAL OF NOTE This Note renews and extends the balance of $2,073,242.00 that Maker owes to Payee on a prior note in the principal amount of $3,392,165.54, which is dated July 1, 2003, executed by Paris Packaging Inc. as Maker and payable to the order of Paris Economic Development Corporation as Payee. The prior note is also described in and secured by a Security Agreement, which is dated July 9, 2003, and for which a Financing Statement is recorded in the Office of the Secretary of State of the State of Texas. Maker acknowledges that the security interest securing the Note is valid, that it subsists against the collateral, and that the security interest remains in full force and effect to secure the payment of the Note. 2. BORROWER'S PROMISE TO PAY In return for a loan that Maker has received, Maker promises to pay in U.S. Dollars the sum of $2,073,242.00 (this amount is called principal"), plus interest, to the order of the Payee. The Payee is PARIS ECONOMIC DEVELOPMENT CORPORATION, Paris, Texas. Maker understands that the Payee may transfer this Note. The Payee or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the "Note Holder." 3. AMENDED INTEREST Interest will be charged on unpaid principal until the full amount of principal has been paid. Maker will pay interest at an annual rate of Three point Fifty-Five percent (3.55%). The interest rate required by this Section 2 is the rate Maker will pay both before and after any default described in Section 6(13) of this Note. 4. PAYMENTS (a) Time and Place of Payments Maker will pay principal and interest on the Note by making payments every month. Maker will make monthly payments on the 15th day of each month beginning on July 15, 2010. Maker will make these payments every month until Maker has paid all of the principal and interest and any other charges described below that Maker may owe under this Note. Maker's monthly payments will be applied to interest before principal. If, on April 15, 2017, Maker still owe amounts under this Note, Maker will pay those amounts in full on that date, which is called the "maturity date." EXHIBIT g Maker will make my monthly payments at 1125 Bonham Street, Paris, Texas 73460 or at a different place if required by the Note Holder. (b) Amount of Monthly Payments Maker's monthly payment will be in the amount of $28,511.17due and payable in U.S. dollars on the 15th day of each month beginning July 15, 2010, and continuing through March 15, 2017, inclusive, plus a final payment of $28,511.43 April 15, 2017. 5. BORROWER'S RIGHT TO PREPAY Maker has the right to make payments of principal at any time before they are due. A payment of principal only is known as a"prepayment." When Maker makes a prepayment, Maker shall notify the Note Holder in writing that Maker is doing so. Maker may make a full prepayment or partial prepayments without paying any prepayment charge. The Note Holder will use all of my prepayments to reduce the amount of principal that Maker owes under this Note. If Maker makes a partial prepayment, there will be no changes in the due date or in the amount or the monthly payment unless the Note Holder agrees in writing to those changes. 6. LOAN CHARGES If a law, which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (i) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (ii) any sums already collected from Maker which exceeded permitted limits will be refunded to Maker. The Note Holder may choose to make this refund by reducing the principal Maker owes under this Note or by making a direct payment to Maker. If a refund reduces principal, the reduction will be treated as a partial prepayment. 7. BORROWER'S FAILURE TO PAY AS REQUIRED (a) Late Charge for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of fifteen (15) calendar days after the date it is due, Maker will pay late charge to the Note Holder. The amount of the charge will be four percent (4.00%) of the overdue payment of principal and interest. Maker will pay this late charge promptly but only once on each late payment. 2 (b) Default If Maker does not pay the full amount of each monthly payment on the date it is due, Maker will be in default. (c) Notice of Default If Maker is in default, the Note Holder may send Maker a written notice informing Maker that if Maker does not pay the amount by a certain date, the Note Holder may require Maker to pay immediately the full amount of principal which has not been paid and all the interest that Maker owes on that amount. That date must be at least 30 days after the date on which the notice is delivered or mailed to Maker. (d) No Waiver By Note Holder Even if, at a time when Maker is in default, the Note Holder does not require Maker to pay immediately in full as described above, the Note Holder will still have the right to do so if Maker is in default at a later time. (e) Payment of Note Holder's Costs and Expenses If the Note Holder has required Maker to pay immediately in full as described above, the Note Holder will have the right to be paid back by Maker for all of Note Holder's costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, court costs and attorney's fees. 8. GIVING OF NOTICES Any written notice required or permitted under the terms of this AGREEMENT shall be given and be deemed to have been duly served if either (1) delivered in person, or (2) deposited certified mail, return receipt requested, postage prepaid in the United States mail, addressed to the designated representative of the respective parties which are designated as follows: Note Holder: Maker/Debtor: Paris Economic Development Corporation Paris Packaging, Inc. 1125 Bonham Street 800 W. Center Street Paris, Texas 75460 Paris, Texas 75460 With an Additional Conv to: City of Paris Finance Director P.O. Box 9037 Paris, Texas 75461-9037 Any party hereto may, at any time by giving ten (10) days written notice to the other party, designate any other address in substitution of the foregoing address to which such notice shall be given. 3 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any one of us may be required to pay all of the amounts owed under this Note. 10. WAIVERS Maker and any other person who has obligations under this Note waives notice of intention to accelerate; except as provided in Section 6(c) above, and the rights or presentment and notice of dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. "Notice of dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 11. SECURED NOTE In addition to the protections given to the Note Holder under this Note, a Security Agreement (the "Security Agreement), dated the same date as this Note, protects the Note Holder from possible losses which might result if Maker does not keep the promises which Maker has made in this Note. That Security Agreement describes how and under what conditions Maker will be required to make immediate payment in full of all amounts Maker owes under this Note. 12. MAKER Maker, reserves the option of prepaying the principal of this Note, in whole or part, at any time after the date hereof without penalty. Accrued and unpaid interest with respect to such principal amount prepaid is due and payable on the date of such prepayment. All amounts of principal so prepaid and received by the owner and holder of this Note shall be applied to the last maturing installments of this Note in their inverse order of maturity. WITNESS THE HAND(S) AND SEAL(S) OF THE UNDERSIGNED. PARIS PACKAGING INC. By: Name: Title: 4 Loan & Credit Line Payments Your first monthly payment will be $28,511.17. Principal Balances $2,500 $2,000 ~ ~ ~ 0 a $1,500 ~ o c a $1,000 a t p- $500 $0 1 This payment is for a$2,073,242.00 loan. This payment is for a total of 82 months at 3.55% APR. Loan summary Payment option 1st monthly payment Loan amount Annual Percentage Rate Term Total payments Totalinterest Ending balance Payment Schedule Nbr Payment 1 $28,511.17 2 $28,511.17 a fixed term loan $28,511.17 $2,073,242.00 3.55% 82 months $2,337,916.20 $264,674.20 $0.00 Ending Principal Principal Interest Balance $2,073,242.00 $22,377.83 $6,133.34 $2,050,864.17 $22,444.03 $6,067.14 $2,028,420.14 EXHIBIT -a 9 17 25 33 41 49 57 65 73 81 Payment Number 3 $28,511.17 $22,510.43 $6,000.74 $2,005,909.71 4 $28,511.17 $22,577.02 $5,934.15 $1,983,332.69 5 $28,511.17 $22,643.81 $5,867.36 $1,960,688.88 6 $28,511.17 $22,710.80 $5,800.37 $1,937,978.08 7 $28,511.17 $22,777.98 $5,733.19 $1,915,200.10 8 $28,511.17 $22,845.37 $5,665.80 $1,892,354.73 9 $28,511.17 $22,912.95 $5,598.22 $1,869,441.78 10 $28,511.17 $22,980.74 $5,530.43 $1,846,461.04 11 $28,511.17 $23,048.72 $5,462.45 $1,823,412.32 12 $28,511.17 $23,116.91 $5,394.26 $1,800,295.41 13 $28,511.17 $23,185.30 $5,325.87 $1,777,110.11 14 $28,511.17 $23,253.89 $5,257.28 $1,753,856.22 15 $28,511.17 $23,322.68 $5,188.49 $1,730,533.54 16 $28,511.17 $23,391.67 $5,119.50 $1,707,141.87 17 $28,511.17 $23,460.88 $5,050.29 $1,683,680.99 18 $28,511.17 $23,530.28 $4,980.89 $1,660,150.71 19 $28,511.17 $23,599.89 $4,911.28 $1,636,550.82 20 $28,511.17 $23,669.71 $4,841.46 $1,612,881.11 21 $28,511.17 $23,739.73 $4,771.44 $1,589,141.38 22 $28,511.17 $23,809.96 $4,701.21 $1,565,331.42 23 $28,511.17 $23,880.40 $4,630.77 $1,541,451.02 24 $28,511.17 $23,951.04 $4,560.13 $1,517,499.98 25 $28,511.17 $24,021.90 $4,48927 $1,493,478.08 26 $28,511.17 $24,092.96 $4,418.21 $1,469,385.12 27 $28,511.17 $24,164.24 $4,346.93 $1,445,220.88 28 $28,511.17 $24,235.72 $4,275.45 $1,420,985.16 29 $28,511.17 $24,307.42 $4,203.75 $1,396,677.74 30 $28,511.17 $24,379.33 $4,131.84 $1,372,298.41 31 $28,511.17 $24,451.45 $4,059.72 $1,347,846.96 32 $28,511.17 $24,523.79 $3,987.38 $1,323,323.17 33 $28,511.17 $24,596.34 $3,914.83 $1,298,726.83 34 $28,511.17 $24,669.10 $3,842.07 $1,274,057.73 35 $28,511.17 $24,742.08 $3,769.09 $1,249,315.65 36 $28,511.17 $24,815.28 $3,695.89 $1,224,500.37 37 $28,511.17 $24,888.69 $3,622.48 $1,199,611.68 38 $28,511.17 $24,962.32 $3,548.85 $1,174,649.36 39 $28,511.17 $25,036.17 $3,475.00 $1,149,613.19 40 $28,511.17 $25,110.23 $3,400.94 $1,124,502.96 41 $28,511.17 $25,184.52 $3,326.65 $1,099,318.44 42 $28,511.17 $25,259.02 $3,252.15 $1,074,059.42 43 $28,511.17 $25,333.74 $3,177.43 $1,048,725.68 44 $28,511.17 $25,408.69 $3,102.48 $1,023,316.99 45 $28,511.17 $25,483.86 $3,027.31 $997,833.13 46 $28,511.17 $25,559.25 $2,951.92 $972,273.88 47 $28,511.17 $25,634.86 $2,876.31 $946,639.02 48 $28,511.17 $25,710.70 $2,800.47 $920,928.32 49 $28,511.17 $25,786.76 $2,724.41 $895,141.56 50 $28,511.17 $25,863.04 $2,648.13 $869,278.52 51 $28,511.17 $25,939.55 $2,571.62 $843,338.97 52 $28,511.17 $26,016.29 $2,494.88 $817,322.68 53 $28,511.17 $26,093.26 $2,417.91 $791,229.42 54 $28,511.17 $26,170.45 $2,340.72 $765,058.97 55 $28,511.17 $26,247.87 $2,263.30 $738,811.10 56 $28,511.17 $26,325.52 $2,185.65 $712,485.58 57 $28,511.17 $26,403.40 $2,107.77 $686,082.18 58 $28,511.17 $26,481.51 $2,029.66 $659,600.67 59 $28,511.17 $26,559.85 $1,951.32 $633,040.82 60 $28,511.17 $26,638.42 $1,872.75 $606,402.40 61 $28,511.17 $26,717.23 $1,793.94 $579,685.17 62 $28,511.17 $26,796.27 $1,714.90 $552,888.90 63 $28,511.17 $26,875.54 $1,635.63 $526,013.36 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 $28,511.17 $26,955.05 $1,556.12 $499,058.31 $28,511.17 $27,034.79 $1,476.38 $472,023.52 $28,511.17 $27,114.77 $1,396.40 $444,908.75 $28,511.17 $27,194.98 $1,316.19 $417,713.77 $28,511.17 $27,275.43 $1,235.74 $390,438.34 $28,511.17 $27,356.12 $1,155.05 $363,082.22 $28,511.17 $27,437.05 $1,074.12 $335,645.17 $28, 511.17 $27, 518.22 $992.95 $308,126.95 $28,511.17 $27,599.63 $911,54 $280,527.32 $28,511.17 $27,681.28 $829.89 $252,846.04 $28, 511.17 $27, 763.17 $ 748.00 $225, 082.87 $28,511.17 $27,845.30 $665.87 $197,237.57 $28,511.17 $27,927.68 $583.49 $169,309.89 $28,511.17 $28,010.29 $500.88 $141,299.60 $28,511.17 $28,093.16 $418.01 $113,206.44 $28,511.17 $28,176.27 $334.90 $85,030.17 $28,511.17 $28,259.62 $251.55 $56,770.55 $28,511.17 $28,343.22 $167.95 $28,427.33 $28,511.43 $28,427.33 $84.10 $0.00 SECOND ADDENDUM TO SECURITY AGREEMENT (CONSUMER GOODS, EQUIPMENT AND FARM PRODUCTS) THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LAMAR § This Second Addendum to Security Agreement (Consumer Goods, Equipment and Farm Products), between Paris Packaging, Inc. and Paris Economic Development Corporation (the "Addendum") is made and entered into by and between Paris Packaging, Inc. ("Debtor") and Paris Economic Development Corporation ("Secured Party") and shall be effective upon the date last signed by all parties. This is a second addendum to that certain agreement entitled "Security Agreement (Consumer Goods, Equipment and Farm Products)," by and between the Debtor and the Secured Party, executed as of July 15, 1998 (the "Security Agreement"). 1. The third paragraph of the Security Agreement is hereby amended to read as follows: "This security interest is to secure the payment of an indebtedness owed by Debtor to Secured Party and evidenced by that one certain promissory note, dated July 15, 1998, in the original principal amount of $4,000,000.00 executed by Debtor, as renewed and extended by that one certain Renewal and Extension Promissory IVote dated July 1, 2003, in the principal amount of $3,392,165.54 executed by Debtor and as further amended by that First Amended Renewal and Extension Promissory Note dated July 1, 2010, in the principal amount of $2,073,242.00 executed by Debtor and payable to the order of Secured Party as follows: BEARING INTEREST AT THREE POINT FIFTY-FIVE PERCENT (3.55%) PER ANNUM, WITH 82 MONTHLY PAYMENTS, DUE ON THE FIFTEENTH (15) DAY OF EACH MONTH BEGINNING ON JULY 15, 2010, IN THE AMOUNT OF $28,511.17 AND MONTHLY THEREAFTER WITH THE FINAL MONTHLY PAYMENT OF THE UNPAID BALANCE DUE AND PAYABLE ON APRIL 15, 2017. Providing for acceleration of maturity and for attorney's fees and to secure all renewal and extensions of all or any part of said indebtedness hereby secured." EXHIBIT C 2. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE SECURITY INTEREST IN THE COLLATERAL EVIDENCED BY THE SECURITY AGREEMENT AS AMENDED BY THIS SECOND ADDENDUM IS SUBORDINATE IN ALL RESPECTS TO (1) THE FIRST PRIORITY SECURITY INTEREST GRANTED TO CAPITAL ONE EVIDENCED BY PROMISSORY NOTE AND SUBORDINATION AGREEMENT DATED JULY 15, 1998 AND TO A LOAN AGREEMENT BY AMEGY NATIONAL BANK AND SUBORDINATION AGREEMENT DATED FEBRUARY 5, 2010. This Second Addendum shall become a binding obligation on the parties upon execution by all parties. By executing this Second Addendum, the parties hereto ratify and confirm all of the other terms, covenants and conditions of the Security Agreement should any provision of this Second Addendum be in conflict with a provision of the Agreement, the Addendum shall prevail. EXECUTED as of the day of . 2010. PARIS PACKAGING, INC. - DEBTOR By: Name: Title: Date: PARIS ECONOMIC DEVELOPMENT CORPORATION - SECURED PARTY By: _ Name: Title: Date: